Home sale profit

Profit of up to $250,000 ($500,000 for married taxpayers filing jointly) is tax-free, if you owned and lived in the home for two of the five years leading up to the sale. This break can be used repeated times, but not more than once in any two year period. A surviving spouse is considered married (and eligible for a $500,000 exclusion) if a home is sold within two years of the death of his or her spouse.